Archive for Metals – Page 19

Trade Of The Week: Gold Prices Top $2000…What Next?

The explosive price action gold has displayed in recent days mirrors a speeding train reaching maximum velocity, with fundamental forces fuelling the upside momentum.

On Monday, gold punched above $2000 for the first time since March 2022 as concerns over the health of the banking system sweetened the appetite for safe-haven assets. This positive start builds on last week’s whooping 6.5% surge as mounting fears around Credit Suisse AG and the overall health of the banking system sent jitters across the board. A palpable sense of unease continues to linger across financial markets despite news over the emergency weekend sale of Credit Suisse AG to UBS Group AG. Contagion fears are rife and this will most likely accelerate the flight to safety, boosting attraction towards safe-haven gold.

Revisiting our 2023, we thoroughly discussed how gold could be one of the biggest winners these years based on speculation around the Fed pausing rate hikes. While gold prices have surged on contagion fears, the string of negative developments has also tempered expectations around the Fed keeping rates higher for longer. With gold hitting the psychological $2000 level, the key question is whether further upside could be on the cards or the party ends around this resistance.

Taking a quick looking at the technical picture, gold is heavily bullish on the daily charts. However, the $2000 level may be a tough nut to crack for bulls. The last time gold secured a weekly close above $2000 was back in August 2020.

The lowdown….

Gold has experienced a sharp change of fortune this month thanks to the market chaos triggered by the Silicon Valley Bank (SVB) collapse and Credit Suisse drama.

The horrible combination of events and growing fears around the banking system sent tremors across financial markets, leaving investors on edge. The wave of risk aversion prompted investors to scatter from riskier assets and rush to safe-haven destinations. Gold prices have gained over 8% this month not only due to contagion fears but expectations around the Fed adopting a less aggressive approach on rates to preserve the financial system.

Concerns over contagion risks and financial stability are likely to influence market sentiment and risk appetite. Any more negative news or developments could spark another wave of risk aversion – ultimately injecting gold bulls with fresh inspiration.

Keep an eye on the Fed meeting

Markets expect the Federal Reserve to raise interest rates by 25 basis points this month. However, this will be a tough meeting for the central bank as it decides whether to focus on macroeconomic data or the stability of the financial system following the SVB collapse and the Credit Suisse drama. There has been a lot of chatter around the recent string of negative developments empowering doves with traders now predicting a 65% chance of a 25bp hike in March – according to Fed Funds Futures.

If the Federal Reserve surprises markets by leaving rates unchanged, this could signal the end of the rate hike cycle with the next move being lower rates. Such a development is likely to send the dollar tumbling along with Treasury yields, which could see gold shine with renewed intensity. Whatever the outcome of the Fed meeting, it may influence gold’s outlook for the remainder of March and possibly beyond.

Can gold conquer $2000?

After bagging its biggest weekly gain since March 2020, gold bulls are clearly in a position of power. The precious metal is drawing strength from multiple sources, ranging from contagion fears, falling Fed hike bets, a softer dollar, and falling Treasury yields. The path of least resistance for the precious metal certainly points north, but can bulls conquer the $2000 level?

From a technical perspective, there have been consistently higher highs and higher lows while prices are trading above the 50, 100, and 200-day SMA. Given how $2000 has proved to be strong resistance in the past, bulls may need to put in the work to secure a solid weekly close above this point. Should $2000 prove to be too much for bulls to handle, prices may sink back toward $1955 before retesting $2000. A solid break above this psychological level may inspire a move higher toward $2070 and levels not seen since August 2020 above $2075.

If bears make a return and drag prices below $1955, the next point of interest can be found at $1935, $1915, and $1900, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

11 Mar

COT Metals Charts: February 21st data showed Speculator bets led by Copper & Gold

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday February 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

*** This data is still a few weeks behind the current data because the CFTC up-to-date data has been delayed due to a cybersecurity event that happened in early February to ION Cleared Derivatives (a subsidiary of ION Markets). This hack of ION has created a problem for the large trader positions to be reported and reconciled. The CFTC has back-filled some data over the past few weeks and will get the data back up to date in the coming weeks.

Weekly Speculator Changes led by Copper & Gold

The COT metals markets speculator bets were lower through February 21st as two out of the five precious metals markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the metals was Copper (7,560 contracts) with Gold (1,572 contracts) also seeing a positive week.

The markets with declines in speculator bets for the week were Platinum (-3,093 contracts), Silver (-1,604 contracts) and Palladium (-199 contracts) with also having lower bets through February 21st.

Data Snapshot of Commodity Market Traders | Columns Legend

Feb-21-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	422,648	0	107,101	21	-129,355	77	22,254	36
Silver	123,906	3	9,902	32	-23,050	66	13,148	39
Copper	219,205	58	2,049	35	-8,510	62	6,461	63
Palladium	11,943	84	-5,188	0	5,552	100	-364	20
Platinum	67,499	58	2,905	22	-8,394	76	5,489	42

Strength Scores led by Copper & Silver

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Copper (35 percent) led the metals markets through February 21st. Silver (32 percent) came in as the next highest in the weekly strength scores.

On the downside, Palladium (0 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Gold (21 percent).

Strength Statistics:
Gold (20.6 percent) vs Gold previous week (20.0 percent)
Silver (32.4 percent) vs Silver previous week (34.7 percent)
Copper (34.5 percent) vs Copper previous week (28.2 percent)
Platinum (22.3 percent) vs Platinum previous week (29.4 percent)
Palladium (0.0 percent) vs Palladium previous week (2.2 percent)

Copper & Gold top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (-7 percent) led the past six weeks trends for metals through February 21st as all metals were in negative trend territory.

Platinum (-64 percent) led the downside trend scores with Palladium (-30 percent) as the next market with lower trend scores.

Move Statistics:
Gold (-16.2 percent) vs Gold previous week (-13.5 percent)
Silver (-27.3 percent) vs Silver previous week (-27.7 percent)
Copper (-6.9 percent) vs Copper previous week (-0.7 percent)
Platinum (-64.2 percent) vs Platinum previous week (-56.6 percent)
Palladium (-30.2 percent) vs Palladium previous week (-27.4 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing that week equaled a net position of 107,101 contracts in the data reported through Tuesday February 21st. This was a weekly rise of 1,572 contracts from the previous week which had a total of 105,529 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.6 percent. The commercials are Bullish with a score of 76.7 percent and the small traders (not shown in chart) are Bearish with a score of 35.7 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	49.7	28.2	10.4
– Percent of Open Interest Shorts:	24.4	58.8	5.1
– Net Position:	107,101	-129,355	22,254
– Gross Longs:	210,185	119,040	43,956
– Gross Shorts:	103,084	248,395	21,702
– Long to Short Ratio:	2.0 to 1	0.5 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	20.6	76.7	35.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.2	14.9	0.8

Silver Comex Futures:

The Silver Comex Futures large speculator standing equaled a net position of 9,902 contracts in the data reported through Tuesday February 21st. This was a weekly reduction of -1,604 contracts from the previous week which had a total of 11,506 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.4 percent. The commercials are Bullish with a score of 66.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.4 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.3	36.6	19.9
– Percent of Open Interest Shorts:	28.3	55.2	9.3
– Net Position:	9,902	-23,050	13,148
– Gross Longs:	44,985	45,388	24,663
– Gross Shorts:	35,083	68,438	11,515
– Long to Short Ratio:	1.3 to 1	0.7 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.4	66.0	39.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-27.3	24.1	-4.3

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing equaled a net position of 2,049 contracts in the data reported through Tuesday February 21st. This was a weekly boost of 7,560 contracts from the previous week which had a total of -5,511 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 61.6 percent and the small traders (not shown in chart) are Bullish with a score of 62.6 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.5	42.9	9.4
– Percent of Open Interest Shorts:	32.5	46.8	6.4
– Net Position:	2,049	-8,510	6,461
– Gross Longs:	73,395	94,047	20,560
– Gross Shorts:	71,346	102,557	14,099
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.5	61.6	62.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.9	6.1	2.5

Platinum Futures:

The Platinum Futures large speculator standing equaled a net position of 2,905 contracts in the data reported through Tuesday February 21st. This was a weekly decrease of -3,093 contracts from the previous week which had a total of 5,998 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.3 percent. The commercials are Bullish with a score of 76.1 percent and the small traders (not shown in chart) are Bearish with a score of 41.6 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.6	38.0	12.8
– Percent of Open Interest Shorts:	37.3	50.4	4.7
– Net Position:	2,905	-8,394	5,489
– Gross Longs:	28,058	25,638	8,655
– Gross Shorts:	25,153	34,032	3,166
– Long to Short Ratio:	1.1 to 1	0.8 to 1	2.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.3	76.1	41.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-64.2	53.7	24.5

Palladium Futures:

The Palladium Futures large speculator standing equaled a net position of -5,188 contracts in the data reported through Tuesday February 21st. This was a weekly decrease of -199 contracts from the previous week which had a total of -4,989 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.8 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.0	68.3	11.5
– Percent of Open Interest Shorts:	59.5	21.8	14.5
– Net Position:	-5,188	5,552	-364
– Gross Longs:	1,913	8,159	1,372
– Gross Shorts:	7,101	2,607	1,736
– Long to Short Ratio:	0.3 to 1	3.1 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	19.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-30.2	32.2	-31.1

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

06 Mar

Trade Of The Week: Are Gold Bulls Back In Town?

By ForexTime

After securing its best week since mid-January, could gold prices be gearing up for more upside?

The precious metal staged a solid rebound last week, climbing 2.5% due to dollar weakness and positive economic data from China. A pullback in Treasury yields last Friday fuelled upside gains, pushing prices closer to the 50-day Simple Moving Average around $1870. Price action suggests that bulls could be back in action after gold received a thorough beating last month. However, the key question is whether the current momentum will result in a bullish reversal or a dead cat bounce.

Revisiting our 2023 outlook, we discussed how gold could be one of the biggest winners this year based on expectations around the Federal Reserve pausing rate hikes down the line. In February, these expectations were tempered by robust jobs data and sticky inflation figures which fuelled fears about rates staying higher for longer. Nevertheless, sentiment towards gold may experience a positive shift this month if US economic data disappoints and inflation shows signs of cooling.

Taking a quick looking at the technical picture, gold turned bullish on the daily charts after breaking above the $1845 lower high. A strong daily close above the 50-day SMA could encourage an incline towards $1880 and $1900, respectively.

Big week for gold as Powell & NFP eyed

Watch this space as the events this week could either fuel gold’s upside momentum or end the party for bulls. All eyes will be on Fed Chair Jerome Powell’s Testimony and US jobs data which have the potential to inject the precious metal with explosive levels of volatility.

On Tuesday, Fed Chair Powell provides his semi-annual report to the Senate Banking Committee. Any hints or signals on the Fed potentially straying away from 25bp hikes in future meetings will most likely influence markets. Powell will address the House Financial Services Committee on Wednesday and is expected to reiterate a similar message. If Powell strikes a hawkish tone during Testimony, this could rekindle dollar strength and rate hike bets – ultimately dragging gold prices lower. Alternatively, a cautiously sounding Powell may cool rate hike bets, providing even more room for gold bulls to fight back.

It’s all about the US jobs report on Friday which could determine whether the dollar’s renewed strength is temporary or lasting. After the breathtaking 517,000 reading back in January, around 215,000 is projected for February. Another healthy jobs report may reinforce expectations around the Federal Reserve holding rates higher for longer. On the other hand, if the NFP report fails to meet expectations – the dollar is likely to tumble as investors pare back their rate hike bets.

Other factors influencing gold

It will be wise to keep an eye on the ADP’s monthly read and initial jobless claims which could act as an appetiser before the main course. On the geopolitical front, developments concerning Sino-US relations may add more spice and flavour to the precious metal – especially if investors become edgy. While escalating tensions could fuel risk aversion sweetening appetite for safe-haven assets, this also includes the dollar. As we have identified earlier, dollar strength tends to make things difficult for gold bulls.

Gold to see rebound or dead cat bounce?

Gold turned bullish on the daily charts after prices blasted above $1845 lower high. The precious metal trades above the 100-day and 200-day Simple Moving Average with bulls eyeing the 50-day SMA at $1870. A strong breakout and daily close above this level could encourage an incline toward $1880 and potentially beyond the psychological $1900 resistance level. On the other hand, if bulls are capped below the 50-day SMA or lose momentum around $1880 – this could trigger a move lower with $1825 and $1800 acting as key levels of interest. Ultimately, the pending key US economic reports and Powell’s testimony will most likely shape the outlook for gold this month.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

25 Feb

COT Metals Update: January 31st data shows Speculator Bets led by Gold & Silver

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 31st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

*** This data is almost a month old because the CFTC’s up-to-date data has been delayed due to a cybersecurity event that happened in early February to ION Cleared Derivatives (a subsidiary of ION Markets). This hack of ION has created a problem for the large trader positions to be reported and reconciled. The CFTC states that they will be back-filling the data over the next couple weeks and will get the data back up to date soon.

Weekly Speculator Changes led by Gold & Silver

The COT metals markets speculator bets were lower on January 31st as two out of the five precious metals markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the metals was Gold (2,608 contracts) with Silver (1,632 contracts) also showing a positive week.

The markets with declines in speculator bets for the week were Platinum (-4,124 contracts), Copper (-2,955 contracts) and Palladium (-974 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Jan-31-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	471,642	16	160,281	36	-180,520	63	20,239	31
Silver	138,263	14	27,316	44	-40,434	57	13,118	37
Copper	224,824	61	17,215	50	-24,414	48	7,199	67
Palladium	11,245	34	-4,271	0	4,632	100	-361	20
Platinum	69,121	40	16,137	33	-22,213	65	6,076	49

Strength Scores led by Copper & Silver

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Copper (50 percent) led the metals markets for that week. Silver (44 percent) came in as the next highest in the weekly strength scores.

On the downside, Palladium (0 percent) came in at the lowest strength level and was in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Platinum (33 percent).

Strength Statistics:
Gold (35.9 percent) vs Gold previous week (35.0 percent)
Silver (44.2 percent) vs Silver previous week (42.4 percent)
Copper (50.0 percent) vs Copper previous week (52.4 percent)
Platinum (33.4 percent) vs Platinum previous week (39.4 percent)
Palladium (0.0 percent) vs Palladium previous week (10.3 percent)

Copper & Gold top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (13 percent) led the six weeks trends for metals. Gold (10 percent) was the next highest positive mover in the latest trends data.

Palladium (-17 percent) led the downside trend scores with Platinum (-12 percent) and Silver (-2.7 percent) as the next markets with lower trend scores.

Move Statistics:
Gold (10.4 percent) vs Gold previous week (10.6 percent)
Silver (-2.7 percent) vs Silver previous week (3.2 percent)
Copper (13.1 percent) vs Copper previous week (14.0 percent)
Platinum (-11.5 percent) vs Platinum previous week (-11.9 percent)
Palladium (-17.4 percent) vs Palladium previous week (-25.6 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing for the week recorded a net position of 160,281 contracts in the data reported through Tuesday January 31st. This was a weekly increase of 2,608 contracts from the previous week which had a total of 157,673 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.9 percent. The commercials are Bullish with a score of 63.4 percent and the small traders (not shown in chart) are Bearish with a score of 30.7 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	54.4	25.5	9.3
– Percent of Open Interest Shorts:	20.4	63.7	5.0
– Net Position:	160,281	-180,520	20,239
– Gross Longs:	256,417	120,147	43,984
– Gross Shorts:	96,136	300,667	23,745
– Long to Short Ratio:	2.7 to 1	0.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.9	63.4	30.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.4	-11.7	16.5

Silver Comex Futures:

The Silver Comex Futures large speculator standing for the week recorded a net position of 27,316 contracts in the data reported. This was a weekly rise of 1,632 contracts from the previous week which had a total of 25,684 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.2 percent. The commercials are Bullish with a score of 57.0 percent and the small traders (not shown in chart) are Bearish with a score of 37.5 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.7	34.7	17.8
– Percent of Open Interest Shorts:	19.9	64.0	8.4
– Net Position:	27,316	-40,434	13,118
– Gross Longs:	54,867	47,997	24,665
– Gross Shorts:	27,551	88,431	11,547
– Long to Short Ratio:	2.0 to 1	0.5 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	44.2	57.0	37.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.7	-0.1	13.7

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing for the week recorded a net position of 17,215 contracts in the data reported. This was a weekly decline of -2,955 contracts from the previous week which had a total of 20,170 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.0 percent. The commercials are Bearish with a score of 48.1 percent and the small traders (not shown in chart) are Bullish with a score of 66.9 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	38.0	36.3	8.8
– Percent of Open Interest Shorts:	30.3	47.2	5.6
– Net Position:	17,215	-24,414	7,199
– Gross Longs:	85,410	81,694	19,764
– Gross Shorts:	68,195	106,108	12,565
– Long to Short Ratio:	1.3 to 1	0.8 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	50.0	48.1	66.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.1	-16.2	25.8

Platinum Futures:

The Platinum Futures large speculator standing for the week recorded a net position of 16,137 contracts in the data reported. This was a weekly reduction of -4,124 contracts from the previous week which had a total of 20,261 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.4 percent. The commercials are Bullish with a score of 65.5 percent and the small traders (not shown in chart) are Bearish with a score of 49.4 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.8	33.0	12.4
– Percent of Open Interest Shorts:	27.4	65.1	3.6
– Net Position:	16,137	-22,213	6,076
– Gross Longs:	35,098	22,808	8,577
– Gross Shorts:	18,961	45,021	2,501
– Long to Short Ratio:	1.9 to 1	0.5 to 1	3.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	33.4	65.5	49.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.5	10.0	8.0

Palladium Futures:

The Palladium Futures large speculator standing for the week recorded a net position of -4,271 contracts in the data reported. This was a weekly reduction of -974 contracts from the previous week which had a total of -3,297 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 20.0 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.9	63.4	11.0
– Percent of Open Interest Shorts:	53.9	22.2	14.2
– Net Position:	-4,271	4,632	-361
– Gross Longs:	1,792	7,131	1,238
– Gross Shorts:	6,063	2,499	1,599
– Long to Short Ratio:	0.3 to 1	2.9 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	20.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.4	19.5	-19.5

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Metals Opinions

24 Feb

Gold: What “Colossal” Central Bank Buying May Mean

“Central banks are so confident that gold prices will continue rising that they are…”

By Elliott Wave International

Central banks have been scooping up gold with a vengeance.

Here’s a Jan. 31 Financial Times headline:

‘Colossal’ central bank buying drives gold demand to decade high

Interestingly, just a few days later on Feb. 3, the precious metal dropped by more than 2%. But setting aside near-term price moves in gold, what you need to know is that government is nearly always the last to act on a financial trend. In other words, when government acts, a financial trend is either nearly or already over.

In the case of gold, consider that central banks were furiously buying it in mid-2011. As you may recall, gold had been strongly rallying. Well, just three months later in September of that year, gold hit a top and fell 46% during the next four years.

Going back in history a little further to around 1999 and 2000, there was the gold selling episode which amusingly came to be known as “Brown’s Bottom” — referring to Britain’s Chancellor of the Exchequer at the time, Gordon Brown.

Brown was fervently selling from Britain’s gold reserves after gold had been in a multi-year downtrend.

You no doubt know the rest of the story: After Brown’s gold selling, the precious metal then entered a multi-year uptrend.

But let’s get back to the present, namely, an instructive chart and commentary from our recently published February 2023 Elliott Wave Financial Forecast:

Central banks are so confident that gold prices will continue rising that they are committing generational amounts to its purchase. Central bank behavior is not a short-term timing tool, but it does provide key input for judging sentiment, which appears strongly bullish.

If you would like to get near-term analysis of gold, as well as more of this broader perspective, you can find it in Elliott Wave International’s flagship Financial Forecast Service.

Or you can apply Elliott wave analysis to gold’s price chart yourself — as well as other financial markets.

If you’re unfamiliar with the Elliott wave model, read Frost & Prechter’s book, Elliott Wave Principle: Key to Market Behavior. Here’s a quote:

The practical goal of any analytical method is to identify market lows suitable for buying (or covering shorts) and market highs suitable for selling (or selling short). When developing a system of trading or investing, you should adopt certain patterns of thought that will help you remain both flexible and decisive, both defensive and aggressive, depending upon the demands of the situation. The Elliott Wave Principle is not such a system, but is unparalleled as a basis for creating one.

Learn more by reading the entire online version of the book for free. That’s right — you can access Elliott Wave Principle: Key to Market Behavior for free once you become a member of Club EWI — the world’s largest Elliott wave educational community.

A Club EWI membership is also free and members get complimentary access to a wealth of Elliott wave resources on financial markets, investing and trading.

Join Club EWI now (no obligations as a member) by following this link: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Gold: What “Colossal” Central Bank Buying May Mean. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Metals

22 Feb

Electrification: Generation, Transmission, and Storage

Source: Michael Ballanger (2/20/23)

Michael Ballanger of GGM Advisory Inc. reviews the energy market and metals associated with the “electrification movement.”

After a sharp reversal in sentiment at the start of the year, the junior explorers and developers (ex-lithium) have faded back into the same frustrating pattern of listlessness where either operational or exploration results deemed “spectacular” in past eras are instead treated as rare and valuable “liquidity events.” Just as the canine being fed by Mr. Pavlov learned to salivate upon the ringing of a bell just before dinner time, traders in the junior gold, silver, copper and most other base metal issues have learned that it is the first bid that gets hit after a positive news release that is the best bid to hit.

That is because the junior miners trade on the margin to the extent that is usually the first trade that sets the mood. It has gotten so bad that I actually received a note from a young trader that informed me of the “lousy results” at Marathon Gold’s Valentine Gold Project in Quebec. Quickly calling them up and noticing an intercept of 5 g/t Au over 18 meters, I asked the young man what made him think the results were “lousy.”

His reply was “Well, the stock was $1.21 the day of the release and it’s now $0.91. Results were obviously lousy.”

Notwithstanding that the results reported by MOZ were anything but “lousy”, it simply underscores how tape action controls the narrative on every single stock out there these days.

I was in a conversation with a prominent speaker and newsletter writer this week that told me that unless one is invested in the companies producing, developing, or hunting down metals associated with the electrification movement, the new generation of traders is largely disinterested.

He informed me that his subscriber base is down over 50% despite having some big success recently with Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) taken out by Kinross Gold Corp. (K:TSX; KGC:NYSE) for around $30 in February 2022.

Rather than complain about it, I am reminded of an anecdote relayed to a group of us by veteran Wall Street Week Elf Julius Westheimer while we were attending the annual Securities Industry Associations (“SIA”) conference in which industry professionals conduct classes in various sectors of the securities industry.

It is very “blueblood” as it is held at the prestigious “Wharton School of Finance” in Philadelphia and they really milk that because when you leave, they present you with a graduation certificate (a “shingle”) that looks like a real Wharton certificate such that when you hang it on your wall, everybody figures you earned a post-graduate degree from Wharton, which you did not. Three weeks over three years at the SIA is nothing like six semesters at the Wharton.

The old Wall Street Week show came on every Friday night around 7:00 p.m. and in the late 70s, it was really the only TV news show that covered stocks and bonds. It aired on public TV in Maryland but was widely syndicated across North America and I believe Europe and was a “must watch” for any young broker trying to learn the trade.

It was on Wall Street Week on October 16, 1987, that the legendary money manager and author Martin Zweig told the host that he actually expected a market crash. The following Monday was the infamous Crash of ’87 where the Dow lost 23.7% in a single trading day.

While most of the Wall Street Week elves were either analysts or fund managers, they used Mr. Westheimer as their “token stock salesman” as his area of specialization was managing retail customers. One of the crowd asked him how he could grow his book (increase the number of clients) and then peppered Julius with a bunch of the books he had read and courses he had taken at which point Julius held up his hand in a gesture of “Enough, already!” and proceeded to tell us all a story which describes not only the retail space in 1979 but also the systemic modus operandi of Wall Street since the first began shuffling paper on a New York curb in the 1800s.

“One day, I was walking to work at Broad and Wall Streets when I noticed a chap trying to sell these yellow umbrellas out of a hand cart but each time a prospective buyer picked one up and examined it, they frowned and put it back. Now, across the street, another chap was selling the same brand of umbrella but they were blue umbrellas and these umbrellas were flying out of his cart so fast that his young son and to keep running back to their apartment for more inventory. The poor guy in the yellow umbrella cart sitting there with no customers flagged me down and ask me what I thought he could do to improve his sales. I said, “Go around the corner to O’Reilly Hardware and pick up a can of blue spray paint.” Because, ya see, down here we only sell what people want to buy.”

Now, the purists that view precious metals with an almost religious affection would never dream of dumping their stacks for something as abhorrent as copper or lithium or uranium because they think that yellow umbrellas are just as useful as blue umbrellas but where they would be in error is that Marketing 101 says you always need to know what one’s customer wants before embarking on a marketing program.

When you go down the “Most Actives” list for the TSX and TSX Venture exchanges these days, you do not find “Gunner Gold,” “Streaker Silver,” “Pugnacious Platinum” or “Parlay Palladium.”

You find the word “battery” or “lithium” in the names of those corporate issuers dominating the list of “Most Actives,” “Biggest Percentage Gainers” and “Volume Leaders.”

In 2020, my list of juniors was all gold and silver with one token uranium name. By 2023, the list is comprised of eight names with only one pure gold developer (Getchell Gold Corp.) a couple of silver names (that have copper and gold exposure) with the rest exclusively copper and lithium, with Volt Lithium Corp. the most recent addition.

I read the results of a poll of trader/investor types last week that asked participants to list the five most important metals in which they wished to invest. At the top by the widest of margins was lithium while at the nadir was silver. I should add that silver is also the least-trusted of all the metals with gold a close second.

With copper, uranium, nickel, and cobalt all lined up behind lithium as the favorites, it should come as no surprise because the new generation of investors/traders invests in thematic “story” stocks. They also invest as a collective thanks largely to their obsession with social media.

The popularity of these sub-sectors can be broken down into one word: “electrification.” Integral to the replacement of fossil fuels by electricity are three prerequisites:

New clean and 100% reliable sources of electricity are going to be needed. The only fuel that can deliver is uranium. Nuclear energy will be the source of the trillions of new megawatts required to complete the transition.
With the new supply of electricity being pumped into an antiquated grid, massive increases in the supply of those metals that transmit electricity are going to be required and the metal that has been the most commonly used is copper.
Once the new source of electricity provided by nuclear energy has been transmitted by the greatly-fortified copper wiring to households, businesses and vehicles, the need for storage particularly in the EV space is going to require lithium (lithium-ion batteries) along with nickel and cobalt.

Enhanced generation, increased transmission infrastructure, and storage capacity are going to demand huge increases in supply. Over the past five decades, the sector that has discovered the lion’s share of the new mineral deposits around the globe are the juniors which then get absorbed by the multinationals with help from their deep-pocketed investment bank pals.

Therein lies the opportunity for investors as we look out through the rest of the “Boring Twenties.” The younger generation of stock buyers could care less about “profligate government spending” or “currency debasement” that would require they use gold and silver as protection. They represent the “yellow umbrellas” of the day for these youngsters and since liquidity is critical for institutional participation, you will never get the volumes required in yellow umbrellas to create the excitement that the “electrification metals” (including nuclear fuel) can generate.

Of course, over time, this all can change as trends are always cyclical and people’s attitudes and preferences will ebb and flow depending on the impact of the “Narrative of the Day.”

For now, however, I just want to find opportunities that will make money. Unfortunately, we cannot take a silver explorer and turn it into a copper or lithium explorer with a can of blue spray paint. Julius Westheimer taught me to avoid the habit of offering products that the investing public simply does not want so I will heed his advice and instead seek out exploration and development plays that focus on the generation, transmission, and storage of electricity while keeping large barbell positions in gold and silver as hedges.

It was the last week of September when I executed my own personal “pivot” jumping off the bear bandwagon and into the neutral camp after the Bank of England decided to buy $5 billion worth of gilts. A couple of weeks later, I went from neutral to bullish but technically, I was about two weeks early in my “bottom” call as the 3,600 S&P level in late September gave way to the October 13^th low at 3,491.

In a similar fashion, I went from bull to neutral on February 8^th and then full bearish this week having put on a small put option position in the SPY:US. I did so because I got two sell signals within a week of each other with the major one being the bearish MACD crossover. It took Thursday’s 43-point drubbing to convincingly send the MACD into “sell” mode so just as I was a tad early back in September, I was again early in getting short. There is a line in the sand at the 4,050 level for the S&P but if it closes below that, I see 3,900 (100-dma) then the December low at 3,764.

Michael Ballanger Disclaimer:

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Disclosures:

1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: My company, Bonaventure Explorations Ltd., has a consulting relationship with: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Metals Opinions

22 Feb

Future Markets Have Been Compromised by Hackers and Gold Bottoms

Source: Ron Struthers (2/21/23)

Future markets have been compromised in the past four weeks by hackers blocking the Commitment of Traders reports. There has been unusual trading in the energy markets and there is no way we know who is buying or selling. Gold sold off in this same time frame and has made a technical bottom. Can it be trusted? Ron Struthers of Struthers Stock Report tells you his opinion.

I believe the oil and gas markets along with the Ukraine war are at very pivotal points and they are both closely tied together. Energy is very critical as fuel for a war machine and as well oil and gas have been highly weaponized and politicized.

I commented that I expected the U.S. was behind the Nord Stream pipeline sabotage, but this should shock the world. Famed investigative journalist and Pulitzer prize winner Seymour Hersh, is older, when investigative journalism was the norm, but sadly no longer. Regardless, for decades he was a star reporter writing for The New York Times and New Yorker and on Wednesday published a new bombshell as his first Substack post, prompting a quick White House response.

He went into so much detail about how the sabotage was planned and carried out, you just can’t make this stuff up. What intrigued me a bit more, the highly skilled divers involved were from Panama City, Florida where I happen to be staying now.

This had to be done covertly and secretly because being carried out by a nation is an act of war, but the Americans are good at that. In a nutshell, they planted explosives during the BALTOPS 22 NATO exercise which is carried out each year in the Baltic sea. They used a trigger device that could be set off some time in the future that was inconspicuous. The trigger could be set off by dropping a beacon from a plane that sent out a signal to set the explosion off. It is fascinating how well this was planned out and I suggest you read Seymour Hersh’s February 8th piece here. Tyler at Zero Hedge did a great summary of the report as well.

No doubt the reaction in energy markets from the Ukraine war and blowing up Nord Stream must have been well thought out with a plan to counter high prices. The Biden Administration released a huge amount of oil from the strategic petroleum reserves (SPR) to counter high prices and also an attempt to damage Russia’s strong energy revenues. If you have any doubt this is mainly about hurting Russia, just look at recent news. Russia announced they will cut oil exports by 500,000 barrels and a few days later Biden announced a 23 million barrel release from the SPR, which just happens to work out to about 400,000 barrels per day. Supposedly it was approved by congress years ago, but the timing is awfully suspicious.

It also stands to reason the Biden Administration would also manipulate the natural gas price down. We got lucky with a record-mild winter in North America and Europe. I don’t think governments can control the weather yet, they are not very good at predicting it other than continuous propaganda on climate change. However natural gas prices plunging to lows only seen at the onslaught of Covid-19 look way oversold and the volume of trading has been very high.

What is more bizarre we don’t have a clue who is doing the trading because the firm (Ion Markets) that produces the Commitment of Traders report was apparently hacked and is broken. The last update on COT was January 24^th, it is supposed to be weekly. If you look at my chart you can see the weekly updates as trader positions are reported up or down, but it is a flat line since January 24^th, the COT patient is dead. We are missing three weeks of reports and today will be four weeks.

I confirmed this with natural gas, oil, gold, and silver. I am sure it is with all commodities as the CFTC said.

Oil and Gas

What is really suspicious is the strange trading activity with a high volume of natural gas and high open interest, high volume in oil. During this time frame is when gold and silver were whacked lower.

Natural Gas closed last Friday at US$2.50 and the last time it was lower than this was the onslaught of Covid-19 in 2020 when most everything got locked down. I can see no good reason for the market to be almost as bearish as it was at the start of the pandemic.

Biden said he will refill the SPR when oil prices drop below US$72, but I doubt that will ever happen even if prices dip that low. China is reopening, wars are escalating so demand is rising again, at a time when supply is being restrained with a push for green energy. I believe draining the SPR during a time when the risk of war escalation is rising is a bad idea.

The U.S. and NATO are depleting their war inventories supplying Ukraine, and I would bet China is just watching and waiting to time an invasion of Taiwan. While NATO is weakening, China continues to build its war machine. It will be extremely difficult for NATO to take on Russia and China at the same time. Basically, it would be WW3 and with that energy prices would soar.

The EIA forecast highlights a tight market. Global liquids fuel consumption in the forecast increases from an average of 99.4 million barrels per day (b/d) in 2022 to 102.3 million b/d in 2024, driven primarily by growth in China and other non-OECD countries. Global liquid fuels production averaged about 100.0 million b/d in 2022, and EIA forecasts it will increase by an average of 1.1 million b/d in 2023 and 1.5 million b/d in 2024.

Gold

Gold markets are also affected by no COT reports. Prices declined in this period and we have no idea who is buying and selling. However, unlike oil and gas, the volume and open interest in Comex gold has been falling.

Gold dropped down to my expected support area and punched out a hammer bottom last Friday. Normally I would suggest this is a buying opportunity, but I don’t trust these markets that have been hacked, with no COT data along with abnormal volume and price action. I would bet that it ends up they can not retrieve the COT data and we just resume data from a new starting point. If so, this would look more suspicious.

Global physically backed gold ETFs kicked off 2023 with net outflows of US$1.6 billion in January and a 0.8% decline (26 tonnes) in total holdings to 3,446 tonnes, the World Gold Council (WGC) says in its latest monthly update. While the gold price witnessed its strongest January in a decade, registering a 6.1% gain, gold ETF outflows in Europe and Asia dwarfed positive demand in North America and other regions.

I have been harping that inflation has become entrenched and stronger numbers in last week’s January data are pointing that way. January Headline CPI (including energy prices) was 6.4% with the street expecting 6.2%. January Y/Y Core CPI was 5.6% and the street expected +5.5%. Housing contributed the most to the monthly increase.

I believe inflation will continue to ease because year over year will be compared to higher year-ago numbers in the months ahead. However, I doubt inflation will get under 5% and it might struggle to get under 6%.

Retail Sales

Retail sales came in strong last week at +3.0% vs the 1.9% estimate. With that and the inflation data, markets saw it as inflationary, and bonds sold off (rates rose). If you remember my comment that there was a huge short position on U.S. treasuries. At this point looks like those shorts are right. And remember on retail sales that those numbers are not adjusted for inflation of +6.4% so real retail sales declined -by 3.4%

Financial markets have upped their bets on additional rate hikes from the Bank of Canada and the U.S. Federal Reserve after blowout employment reports in both countries and higher-than-expected inflation data from the United States. Interest rate swaps, which capture market expectations about future rate decisions, have gone from pricing in two rate cuts by the Bank of Canada before the end of the year, to pricing in another rate hike in July and no rate cuts until 2024. That would bring the bank’s benchmark rate to 4.75%. In the U.S., markets now see the Fed increasing its benchmark interest rate to 5.25% by July, a quarter-point higher than expected two weeks ago.

The 10-year Treasury has declined a fair bit in February and looks to test the November 2022 lows.

Zonte Metals

I did a zoom interview with CEO Terry Christopher, you can watch it here on youtube.

We covered plans for drilling Cross Hills and all that has been learned that greatly improve the odds of making a discovery this year. Discussed the importance of Victoria Gold exploring up to Zonte Metals Inc.’s (ZON:TSX.V) border at McConnells Jest in the Yukon.

Zonte did have a surface sample there that ran around 100 grams gold and plans to go back there in 2023. Terry gave a synopsis of the Colombia court proceedings. Zonte won in the first two levels of court so it went to the third and final level.

Here B2Gold Corp. (BTG:NYSE; BTO:TSX; B2G:NSX)/AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) presented numerous submissions to try and win the case, but Zonte defeated/defended them all so is batting 100% thus far.

Just before Covid-19, it was supposed to go to trial but everything got shut down.

Things are getting back to normal so I believe we could hear about a trial in 2023.

The technicals on the chart look very good with a long-term wedge pattern in play.

There is long-term support of around CA$0.10 going back about seven years.

A nice stage one base has been built between CA$0.09 and CA$0.125 over the last five months. I think the stock is ready to take off higher ahead of drilling. The key will be a break over the downtrend which is now around CA$0.15 to CA$0.16.

There is not much resistance around the CA$0.21 area, so that looks like a reasonable target at this time.

And for some humor, the one balloon that the U.S. shot down over Canada using two US$400k missiles was a US$12 to US$200 hobby balloon flown by the Northern Illinois Bottlecap Balloon Brigade. Yes, folks, that is correct, let a Chinese spy balloon fly across the U.S., but shoot down a hobby balloon right away. Talk about incompetence or just plain funny. Maybe we should buy defense stocks at this rate of missile consumption.

Struthers Stock Report Disclaimers:

All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate.

The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information.

Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.

Disclosures:

Charts provided by the author.

1) Ron Struthers: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Zonte Metals. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: Greenbriar Capital. I determined which companies would be included in this article based on my research and understanding of the sector.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services, or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees, or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in the securities mentioned. Directors, officers, employees, or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Financial News Metals

17 Feb

Canadian Exploration Co. Bullish on Global Tellurium Demand

Source: Streetwise Reports (2/16/23)

First Tellurium Corp. sees increased tellurium production in a bid to meet rising global demand in 2023.

First Tellurium Corp. (FTEL:CSE) is expecting global demand and prices of tellurium (Te) to increase this year, therefore also seeing bright prospects for its Te production from its Deer Horn property in British Columbia, Canada.

FTEL is a company engaging in the exploration and development of predominantly Te mines. The company has two high-grade mining jurisdictions, which are its Deer Horn property in British Columbia, Canada, and Klondike property in Colorado, U.S.

Why Tellurium? Looming Shortage Driving Demand and Price Increases

Te is essential for the generation of clean and sustainable energy. It is a raw material for manufacturing solar photovoltaic (PV) panels, new batteries, and other advancing technologies.

Te is incorporated in lithium-ion battery cathodes, and this improves the batteries’ energy density for longer-lasting charging; enhanced electrical conductivity for quicker charging time; and safety. For solar panels, Te provides better conductivity, making a thin film efficiently absorb sunlight and convert it into electricity.

FTEL President and CEO Tyrone Docherty said 90% of Te comes from refining copper, and only 10% comes from mines. The company said there is a looming shortage of Te as the demand is rapidly growing, but much of the supply is not mined on its own.

He said FTEL is well positioned to increase the share of mining in Te production and to meet the increasingly growing demand for Te, which mostly comes from the clean energy sector.

According to a report by Investing Whisperer, other than sourcing through copper processing, Te is a rare and brittle metalloid element found in small quantities in the Earth’s crust — about eight times rarer than gold itself. As the demand from solar panel manufacturers grows, Te production is seen to shoot up in the near future.

“It’s possible that the market for Te could be much larger in the near-to-mid term–due to the increased use of solar panels. Right now, it’s a very small market with just under 600,000 kg produced in 2021,” the report said.

China has 20% of the world’s Te resource and has produced most (61%) of the global Te output last year. Responding to the looming shortage fears and bright prospects in terms of demand, the U.S. wants to get a larger share of the pie — to see more domestic supply chains of Te which denotes an increase in delivery from U.S. suppliers like FTEL.

Chen Lin of What is Chen Buying? What is Chen Selling? recommended FTEL in a December posting. He mentioned that North America is too dependent on outside sources for the element and went on to say, “This metal can be in demand, this is a pure-play, and management just a lot of (its) own money in the stock.” Lin later reiterated his recommendation in a February newsletter. He said, “FTEL was very well received at both the Metals Investment Forum and Vancouver Resource Investment Conference. The management was surrounded by investors and talked for hours afterward. I think investors’ interests definitely picked up and there could be other newsletters recommending it.”

FTEL Answers Demand

FTEL answers the demand for critical metals such as Te, Au, Ag, Cu, and W, with a focus on Te. Major U.S.-based solar PV manufacturer First Solar has recognized their Deer Horn property as one of the four world-class Te projects, with the other three located in Sichuan, China; Sonora, Mexico; and Boliden Area, Sweden.

New Te supplies from the company will benefit as prices need to increase to meet Te demand. From a US$70 per kg price level a year ago, prices have already gone up to US$80 per kg as of January 2023. Its market price is expected to get a boost from First Solar as its annual Te demand could exceed last year’s Te global production by up to 70%.

The Deer Horn jurisdiction hosts the only Te, Au, and Ag resources in North America, and has also passed a positive PEA or Preliminary Economic Assessment, which is crucial for moving forward with any mining project.

Based on Investing Whisperer’s analysis, FTEL and its two mines with Te deposits close to the surface is the only Te play for investors.

The company adopts a phased expansion approach, where they start exploration and production with small mines, and then expand mining areas in the same territory over time.

The company benefits from this approach with lower exploration and development costs, lower capital spending, faster production and delivery of supplies, a faster-permitting process with small mine applications than larger mines, and many others.

FTEL’s exploration in 2022 extended their mineral zone potential in the Deer Horn property to an additional 1.1 km, expanding their total potential strike length to 3.5 km.

Based on Investing Whisperer’s analysis, FTEL and its two mines with Te deposits close to the surface is the only Te play for investors.

The report also factored in the prospect to expand these sites in the future, and that there are Au, Ag, Cu, and W deposits in the mines which can account for 50% of the company’s value.

The Catalyst: Drilling Set for the Summer

FTEL is set to start its drilling within its polymetallic Deer Horn site in the summer of 2023. This will yield new Te, Au, and Ag production for the company which will allow them to deliver supply this year.

The company will also greatly benefit from favorable market conditions such as the ongoing advances in battery technologies, and solar power demand, as well as the push for funding and focus on critical metals by the U.S. and Canadian governments.

EcoWatch mentioned that as the green energy technology sector grows, then so is the demand for Te and other critical metals which can have Te as a byproduct, given that 90% of global Te supply comes from refining copper mining. FTEL has two predominantly Te mines that can contribute to supporting the growth of green energy technologies.

On February 2, 2023, technical analyst Clive Maund touched on the outlook of the company, saying, “First Tellurium presents a positive picture and overall looks like a low-risk setup. We, therefore, stay long.”

Ownership and Share Structure

Streetwise Ownership Overview*

First Tellurium Corp. (FTEL:CSE)

	Retail: 89%
	Management/Insiders: 11%
	Institutions & Strategic Investors: 0%

89%

11%

^*Share Structure as of 2/10/2023

According to the company, 11% of First Tellurium is owned by management and insiders. According to Reuters CEO, President, and Director Tyrone Docherty owns 10.50%m with 7.63 million shares. Director Josef Anthony Steve Fogarassy has 1.38%, with 1 million shares, and Director Lyle Allen Schwabe has 0.77%, with 0.56 million shares.

There are no institutional investors and the rest is retail.

FTEL has CA$1.5 million in the bank with a CA$35,000 to CA$40,000 monthly burn rate.

The company has a market cap of CA$23.37 million and 84.026 million outstanding shares. Their stock is trading between CA$0.085 and CA$0.710 based on its 52-week range.

Disclosures:
1) Nika Cataldo wrote this article for Streetwise Reports LLC as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

Financial News Metals

07 Feb

Electrified Excitement

Source: Michael Ballanger (2/6/23)

Michael Ballanger of GGM Advisory Inc. reviews updates within the metals and energy sectors, focusing on some key companies he believes you should take a look at.

In a couple of weeks, I will be defying the accuracy of the actuarial studies by making that fateful transition from sexagenarian to septuagenarian while continuing to shovel winter snow and taking eight-kilometer walks most mornings (when it isn’t –20 C). Being a resident of this “little blue dot,” as Carl Sagan refers to our planet, for seven decades means that I have more than a few memories to recount and more than a few stories to tell.

With that comes an ample helping of regrets of both personal and career origins, but those are offset by the sweet memories of family, friends, and fortuitous events that have been integral to a magnificent journey through time.

One of the most underrated aspects of aging is that trials and tribulations that would have escalated blood pressure when I was in my thirties no longer make a dent in the stress meter, while conversely, considerate gestures and flatteries deemed unremarkable in youth are greatly appreciated in later years.

“Humanity has mined about 700 million tonnes of copper to date. The problem is the need to mine that same amount in the next 22 years to keep up with the deepening green energy transition.”

— Robert Friedland, Billionaire mining entrepreneur

Most members of the Boomer Generation can tell you where they were and what they were doing when JFK was gunned down in 1963, where they were in 2001 when the Twin Towers came down, and for residents of former Czechoslovakia, Hungary, Afghanistan, and Ukraine, they will never be able to forget the day the Russian tanks crossed their borders.

Over the past seventy years, there have been far too many instances where political ambition causing pain and suffering was allowed to exert itself within societies and populations, but from my perspective, be it world wars or regional skirmishes, it is always the misguided intentions of politicians that lie as the root of these evils. Left to their own devices, humans, by and large, have learned how to survive together. For centuries upon centuries, homo sapiens have learned to join arms and raise crops, buildings, and families largely absent the horrors of war, especially when they are insulated from the insidious narcotic that accompanies political ambition.

When I sit down at night and listen to speakers like Robert Friedland speak about the future of the global mining industry with specific reference to electrification, I am emboldened that a powerful and highly-influential billionaire entrepreneur like this can offer such a concise vision of the world. Friedland was recently the keynote speaker at the Future Minerals Forum in Riyadh, Saudi Arabia, where he presented the case for “responsible mining” in the quest to provide sufficient quantities of minerals required to implement the global initiative for electrification.

Copper

Included in his remarks were specific mentions of copper, a maidenhead mineral for this publication as well as the suite of minerals used in batteries.

To have a crusty old billionaire boomer take such an active role in the promotion of “responsible mining” crucial to ending mankind’s reliance on fossil fuels is encouraging. Furthermore, to have the greatest promoter that I have ever watched take up the cause in speaking to Heads of State around the globe is exciting. It is also important to understand that the Friedland flagship company, Ivanhoe Mines, is a part owner (39.8%) of Kamoa-Kakula Copper Mine, the world’s fourth-largest but highest-grade copper mine, the Kamoa-Kakula located in the Congo.

With that in mind, please do not get the mistaken impression that I imply that Friedland has been suddenly motivated by altruistic empowerment in place of greed. Taking up the cause of electrification plays beautifully into the future fate of Ivanhoe, and that he now has subsidiary companies Ivanhoe Electric and Cabot Energy exploring opportunities in battery metals and lithium deposits infers a vertical integration for all things that will require an ample Friedland mineral supply, a talent of which he is most certainly capable, gifted, and blessed.

I am certain that if his Electrification Swan Song turns out to be a roaring success, we will have US$8.00/lb. copper and US$500,000/mt lithium, one will find not only a shining halo in the Friedland war chest but also a brand new currency calculator as well. And that’s just fine because there is no motivation better in “building things better” than capitalist aspirations, which include fame and respect along with copious profits. Hence the term “Master Friedland.”

The BLS came out on Friday with the most absurdly-manufactured statistic in economic history with the staggering news that the U.S. economy created more jobs in the December reporting period than median estimates were forecasting. Estimated to be in the 187,000 “new jobs” range, the number came in at 517,000, a 2.76 times your money “beat” that sent everything into the ash can except, of course, the yield on the 10-year treasury, which spiked up 4% to the 3.519% level.

Gold

Notwithstanding that, I absolutely guarantee major revisions with the next report to have such a reaction in the precious metals markets reeked of one thing — shenanigans. No good, rotten, lousy, nefarious, and totally nauseating shenanigans. The gold market has advanced for the past year during a period where yields essentially tripled, so even when Jay Powell threw a number of half-point rate increases at the capital markets, gold absorbed the event because job growth was not the driving force behind gold prices.

The pundits claimed that the shock in the jobs report would see the Fed having conniptions over the inflationary ramifications of the tight employment scene, but what they all forget is that the cost of servicing the U.S. debt bomb is approaching US$1 trillion per year and there comes a point in time where the U.S. currency begins to take the brunt of the credibility gap where foreign investors begin to focus not on the return ON investment but rather the return OF investment before they write a cheque.

In my view, all that has happened is an overreaction to the overbought condition that I spoke of earlier in the week to my subscribers. Using the gold bullion ETF SPDR Gold Trust (GLD:NYSEARCA) as a trading and charting tool, the big resistance band from late December in the US$170-175 range is now supported after prices escaped the range in January.

We also got a golden cross with the 50-DMA moving above the 200-DMA last month, putting all the technical conditions on buy signals until Wednesday, when we got a bearish MACD crossover constituting a short-term sell signal. As a result, we now have a large gap in the chart between US$175 and US$178 that will get filled in probably sometime next week into a rally.

RSI has moved a massive 25 points in two trading sessions, moving from over 70 (overbought) to under 45, placing it firmly in neutral now, and if we get further weakness early next week, GLD could actually be approaching oversold status in what is surely one of the quickest overbought-oversold transitions in history which – AGAIN — reeks of shenanigans.

Flipping over to spot gold, I maintain my price objective at US$2,250-2,350 in 2023, with the HUI dancing through 350 by year-end. The reasons I own gold and silver do not include a phony interpretation of employment data conjured up and delivered by ambitious bureaucrats with highly-politicized agendas. US$1,850 spot gold or US$170-171 on the GLD:US and I back up the Ram.

Lithium

Up until a few years ago, I had never come across any resource opportunity that involved the exploration for or development and/or production of lithium. However, given the heat behind the lithium juniors back in 2018, I felt obliged to attempt to bring myself up-to-speed on that market but since its pricing structure was thoroughly dominated by China, I elected to give it a pass.

Then a few weeks back, I was discussing the state of the junior resource market with an Australian colleague who proceeded to show me the chart patterns of several West Australia junior lithium plays, at which point I nearly fell over.

One of them, Patriot Battery Metals Inc. (PMET:CA) traded at CA$0.21 in late-2021, which I thought deserved mention in last week’s weekly missive as it closed over CA$10 per share.

Then with the weekend news that General Motors was investing US$650 million into Lithium Americas Corp. (LAC:TSX; LAC:NYSE) to assist in the development of the Nevada-based Thacker Pass lithium deposit, every lithium stock on the board went into full liftoff mode with PMET closing up another 60% for the week.

Accordingly, without delay, I launched into a crash course on lithium, ever fearful that I was tempting fate by charging into a market already well-exploited by stock jockeys from Perth, Australia, to Spokane, Washington. What I discovered was a commodity that was on the verge of a massive shortage situation, and despite the 20% correction in lithium prices since last November, demand for the lithium-ion batteries used in every electric vehicle currently in production is going parabolic but with new supply still a few years out.

Lithium carbonate prices in China fell to CNY 472,500 per tonne in February, the lowest since June 2022 and over 20% down since their all-time high of CNY 600,000 in November, as stronger supply and expectations of lower demand drove industry players to bet on a market surplus this year. Added capacity pushed Chinese domestic production to soar by 89% year-on-year in December and by 32.5% in the whole of 2022 despite output cuts in lake-based smelters.

Additionally, top producer Australia projected global output of lithium carbonate equivalent to reach 915,000 tonnes in 2023, a 32% rise from 2022’s estimate. Meanwhile, electric vehicle sales in China are set to decline sharply after the world’s leading consumer stopped subsidies in the sector.

Lithium and its compounds have several industrial applications, including heat-resistant glass and ceramics, lithium grease lubricants, flux additives for iron, steel, and aluminum production, lithium metal batteries, and lithium-ion batteries. These uses consume more than three-quarters of lithium production.

From the Wikipedia textbook: “Because of its relative nuclear instability, lithium is less common in the solar system than 25 of the first 32 chemical elements even though its nuclei are very light: it is an exception to the trend that heavier nuclei are less common.” What that implies is that there is not a great deal of naturally-occurring lithium in nature, so it would stand to reason that dependable resources of lithium concentrate will be in high demand, thus giving junior developers a first-mover advantage if they have had the vision to lock down said resources.

To be sure that I was going to avoid the agony of “Bag Holder Blues,” an affliction suffered by “Last Minute Louie’s” that enter a hot market at or near the top, I did some digging and discovered that not only has Bank of America placed Sigma Lithium Corp. (SGML:TSXV;SGML:US) on its list of “50 Stocks for 10 Scarcity Themes”, a group of automobile manufacturers including BMW, Daimler-Benz, and Volkswagen have entered into an agreement with Chilean-based “Responsible Lithium Partnership” group with a view to developing the Salar de Atacama salt flat. There are two distinct takeaways from this information.

Large, multi-billion dollar companies with global presences are investing in lithium projects on both the industrial-usage level and the investment banking level, and
To have a TSX Venture exchange resource developer trading at CA$40 (SGML:TSXV) is uncanny, but it clearly illustrates the appetite for and opportunity surrounding junior lithium developers.

Two weeks ago, I mentioned Allied Copper Corp. (CPR:TSX.V; CPRRF:OTCQB), trading at CA$0.135 after their recent acquisition of Volt Lithium Corp. As the name change will go into effect next week, it was fitting that they announced the termination of the Klondike copper deal in Colorado as evidence that their working capital position is going to be dedicated to the Rainbow Lake Lithium project in Alberta.

The company is completing financing that has been upsized from CA$2m to CA$3m in order to complete the construction of the pilot plant designed to test the economic viability of the process. Early testing confirmed a better-than-anticipated 93% recovery rate for the lithium carbonate, and it is expected to be duplicated after pilot plant completion.

CPR traded up to CA$0.30 to a new 52-week high on Wednesday before closing at CA0$.23 on a weekly volume of 1.88 million shares. Considering that the unit funding is being done at CA$0.20, the tape action has been nothing short of superb.

Once the deal closes, I see another big leg up as the post-financing market cap of US$22 million appears compelling relative to its peer group.

Michael Ballanger Disclaimer:

Disclosures:

1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: My company, Bonaventure Explorations Ltd., has a consulting relationship with: None.

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Allied Copper Corp. and Lithium Americas Corp., companies mentioned in this article.

Metals Opinions

06 Feb

Gold and Inflation: Here’s a Market Myth

“If you believe in Gold as a consumer price inflation hedge then…”

By Elliott Wave International

Back in the days of the Roman Empire, an ounce of gold could buy a Roman a well-made toga, belt and finely crafted sandals.

In modern day Rome, lo and behold, a businessman can become sharply dressed via the value of that same ounce of gold.

So, yes, gold has maintained its store of value over the centuries.

However, in the relative short term — which can last years — gold may not be the inflation hedge that gold bugs believe it to be.

In a moment, I’ll show you how this relates to what’s going on with gold and inflation now. However, let’s first get insights from a chart and commentary from our February 2022 Global Market Perspective, which published when inflation was really getting going (The monthly Global Market Perspective is an Elliott Wave International publication which covers 50-plus global financial markets):

The chart shows the U.S. dollar price of Gold versus the annualized rate-of-change in the U.S. Consumer Price Index (CPI). If you believe in Gold as a consumer price inflation hedge then, as the CPI is accelerating, the Gold price should be advancing. The green shaded areas show that there have been five occasions since 1980 when the opposite was true, the last year being a good example. On the other side, the Gold-Inflation myth would allude to the price of Gold declining as CPI was decelerating. The grey shaded areas show five occasions since 1970 when this was not the case, 2007 to 2010 being a prime example.

Fast forward to today and we have these headlines:

US inflation eases grip on economy, falling for a 6th month (AP News, Jan. 23)
Inflation in U.S. could turn negative by midyear, says [this] billionaire investor … (MarketWatch, Jan. 28)

What’s happened to the price of gold? It’s steadily climbed in the face of easing inflation. Of course, this is just the opposite of what was occurring around this time last year. In both cases, the price of gold went in the opposite direction from what many would expect.

On Sept. 28, gold was trading at $1613.75 and has been in an overall uptrend since. The precious metal traded as high as $1949.46 on Jan. 26 (as of this writing on Jan. 30).

The bottom-line takeaway is that the widespread expected relationship between gold and inflation is not always there — indeed, there have been several instances in the past several decades where the opposite is the case.

Know that Elliott wave analysis, which is by no means a crystal ball, can nonetheless help you anticipate gold’s next big price move.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Learn about these “forms” for free as a Club EWI member.

That’s right — you can gain free access to the entire online version of this Wall Street classic by joining Club EWI — the world’s largest Elliott wave educational community. A Club EWI membership is also free, and members enjoy complimentary access to a wealth of Elliott wave resources on investing and trading.

Get started right away by following this link: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Gold and Inflation: Here’s a Market Myth. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Metals Opinions

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